New Jersey has joined the Federal Trade Commission and 16 other states in suing Amazon.com Inc., alleging that the e-commerce giant uses anticompetitive and unfair strategies to illegally maintain its monopoly power.
In the sweeping antitrust lawsuit filed Sept. 26 in U.S. District Court in Seattle, the FTC and a bipartisan group of state attorneys general claim Amazon suffocates competitors and raises costs for both sellers and consumers, creating an inferior shopping experience.
The FTC believes the mega-retailer deters online sellers from discounting goods and lowering prices below what is available on Amazon, pushing prices higher across the internet. It also argues that Amazon pressures sellers into its fulfillment services, making it more expensive for them to offer their products elsewhere.
“We’re bringing this case because Amazon’s illegal conduct has stifled competition across a huge swath of the online economy. Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers,” said John Newman, Deputy Director of the FTC’s Bureau of Competition. “Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.”
New Jersey Attorney General Matthew Platkin commented, “Through conduct that illegally enables it to dominate the online retail market, Amazon harms New Jersey residents and businesses by stifling competition and limiting consumer choice.
“Our complaint seeks to promote fair competition, encourage innovation, and force Amazon to relinquish its monopoly. It’s time to break free from their digital stranglehold and create a level playing field,” Platkin stated.
Amazon denied the allegations.
In a statement posted online, David Zapolsky, Amazon’s senior vice president, global public policy and general counsel, said, “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”
“If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses — the opposite of what antitrust law is designed to do,” he said.
New Jersey, along with the FTC and state plaintiffs, are asking the court for a permanent injunction against Amazon to keep the company from “engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition.”
Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin also joined the FTC’s lawsuit.